UK watchdog criticises shortcomings of Post Office “Locals”

UK watchdog Consumer Focus has issued a new report highlighting “unresolved problems” in proposals to update and streamline British post offices. From summer 2012, the Post Office’s Network Transformation will see one in five sub-post offices convert to the PO Local model as part of the largest set of planned changes in the Post Office’s history.

Most sub-post offices currently operate as part of a small shop, but have a separate post office counter with dedicated staff. The Locals model will see post office services delivered by trained shop staff from the main counter of retail outlets such as convenience stores or petrol stations, rather than from a separate dedicated post office area.

Consumer Focus said a new approach was needed since many post offices were no longer financially sustainable. With around 2,000 PO Local conversions, these changes provide a “major opportunity” for improvements, it said.

In its “Open All Hours” report, the group highlighted some positives in the concept, including the popularity of extended opening hours, but it also warned that mystery shopper visits and customer research at the 105 branches trialling the model suggested there were issues the needed to be addressed to deliver a reliable service.

Inconsistent

Inconsistent pricing and product advice, poor product availability, limited cash withdrawal or payment facilities, the refusal to accept large or heavy parcels and the sale of unnecessary special shipping services were among the problems uncovered by the Consumer Focus report.

The watchdog also said privacy levels in PO Locals were found to be “poor” by a third of customers, making them reluctant to undertake high-value, personal or confidential transactions in branches.

Mike O’Connor, the Consumer Focus chief executive, said there were also concerns at the range of services on offer in PO Locals, and the fact that many did not offer longer opening hours.

“With more people buying goods off the internet, it would make so much sense to be able to pick up an undelivered parcel from a PO Local outside usual working hours,” he said. “That many Locals don’t offer this service is the sort of issue Post Office Limited should focus on, to make this programme the success we all want it to be.

O’Connor said Post Office Ltd would be missing a “golden opportunity” if it does not get the PO Local model right.

“We don’t want to see shortcomings we’ve picked up in pilot branches being replicated across two thousand PO Locals in the future. We do however want to see the advantages and benefits such as convenience and longer opening hours that our research has also identified,” he said.

Union

The Communication Workers Union, Britain’s biggest union for postal workers, welcomed the finding of the Consumer Focus report, but said the criticisms did not go far enough, such as highlighting the “financial realities” of running a post office.

CWU general secretary Billy Hayes said: “The report draws attention to the failings of the model, but we are less optimistic that it can be made to work than the watchdog. The lack of proof that financially the model is viable for postmasters is disappointing as it leaves this central question unanswered.”

Hayes cast doubt on the ability of retailers to provide “high quality” post office services when their priorities were on selling their own retail products.

He said: “Our postmaster members are concerned at the economic viability of the Locals model which will ultimately determine whether it works or not and with it how many post offices survive this major disruption to the network. Ultimately it could lead to significant closures or wholesale dumbing-down of post office services.”

• Government official Susannah Storey has joined the Post Office Ltd Board as a Non-executive Director. Storey works at the Shareholder Executive, Department for Business, Innovation and Skills, most recently as Head of the Royal Mail and Postal Services team, and prior to joining in 2006, worked at Citigroup and Schroders, specialising in UK Corporate Finance. Commenting on her appointment, Post Office Ltd chairman Alice Perkins said: “Her extensive knowledge and previous experience of the postal services industry will be an invaluable asset to us as we continue to transform and grow our business.”